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Punish the savers
Tuesday, September 18, 2007
Sorry about the delay, but the decision on how much cash (that used to earn five percent) to convert to the streetTRACKS Gold Shares ETF (AMEX:GLD) was not an easy one - it turned out to be about ten percent, which should help in a very small way to make the blue bars in this chart keep going skyward along with the gold price.
Many others will likely come to the same conclusion to broaden their definition of savings in a similar manner, albeit much later and at much higher prices for the yellow metal.
Ben Bernanke may have seen what's in store for the inflation statistics in the months ahead (as documented here last month) and figured he'd better get on with it - it's a lot easier to cut rates when the government statistics show inflation is under control. Look for that condition to change rather dramatically before the end of the year.
Here are the last two policy statements side-by-side:
Count me as one of those who have just lost a great deal of respect for the new Fed chairman. To date, nary a bad word has been offered up here regarding the job that Ben Bernanke has been doing - that may soon change.
Full disclosure: Long GLD at time of writing.
10 comments:
I don't get it... isn't Benanke doin what you want him to do? Why do you lose respect?
He did what we expected not what we want. No, a responsible Fed would raise rates 50bp not drop them. That would purge all the crap in the economy and set up a real recovery.
I must have missed something while we were away - when last I checked BB was still an inflation hawk, not willing to give in to Wall Street distress.
Things must be much worse than they appear.
eight more tons added today
Tim,
Of course I can't see when the Fed is not going to talk tough on inflation. What advantage could there be to not doing so. I'm just surprised that people actually believe them.
Moin from Germany,
Bernanke has pulled the Greenspan ;-)
Lets hope the long end of the bond market will teach him a lesson.
But i doubt it.....
Gold is indeed looking better hour by hour.....
I think people are overly bashing Bernanke on this one. The 50 bps cut wasn't that bad.
A 25 bps would have left open another automatic 25. This 50bps gives a clean slate for the next meeting.
Good to see a measured comment on the cut - Fed looks forward with trepidation, and the critics and cheerleaders should try the same, even through their fogged lenses.
But he's still Ben-dover Bernanke.
It's amazing how much bullsh7t can be created out of thin air from a bunch of people playing with made-up numbers and money isn't it?
The whole system is made up of hot air.
I have serious doubts as to the integrity and honesty of those government statistics on inflation and unemployment. I strongly believe figures are manipulated to suggest and hopefully sell to the rest of us a rosy economy and picture perfect society. Get real, how can anybody with a bit of common sense rationalize the actions of the fed and still suggest that these guys are honestly protecting the interests of the masses as opposed to those of the few.
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